For more stories about where the money flows, click here for our Capital section
In a Feb 10 report, analyst Kareen Chan says, “We think the worst is over as we see earnings recovering sequentially due to: gradual ARPU recovery post-Covid; potential 5G ARPU uplift of 1.9% y-o-y from FY2023-2026; Bharti driving associates’ recovery.” The analyst has also kept the stock as the top pick in the Singapore telco space, as she sees deep value in the stock. Currently, the market is ascribing almost zero value to its Singapore and Australia operations, while offering 5.3% FY2022 yield. RHB Group Research too has reiterated its “buy” recommendation on Singtel with an unchanged target price of $3.10, while also keeping the stock as its preferred Singapore telco pick. According to the research team in a Feb 11 report, “We expect a stronger earnings uplift in 4QFY2021, following the Phase 3 reopening of the Singapore economy, and improved associate contributions. Valuations remain undemanding, after the multi-year derating in 2020, with the stock trading at 0.5SD below the historical EV/EBITDA mean.” Similarly, CGS-CIMB Research has maintained its “add” call on Singtel with a target price of $3.10. Lead analyst Foong Choong Chen notes in a Feb 10 report that Singtel’s 3QFY2021 and 9MFY2021 results were slightly ahead of his FY2021 forecast, on narrower-than-expected Bharti losses. He also likes the stock for its fairly resilient enterprise segment, which eased by a model 4.4% y-o-y and 3.5% q-o-q on fewer JSS credits, despite business disruptions and weaker macroeconomic conditions.
SEE: Singtel data compromised through hack on third-party vendor